Eric Payne
11-03-2007, 12:38 PM
On Wednesday, both Bill and I had an appointment with our cardiologist. Though we're normally seen at the same time by the doc (Ah, togetherness... even in a medical examination... ain't it wunnerful?), on Wednesday, our appointments were 20 minutes apart.
Many months ago, before we purchased Gilligan, I had jokingly asked the doc about giving me a prescription for a Segway so I could pick one up at my local pharmacy for $50 (the highest prescription co-pay under our medical plan). After we got Gilligan, I did some research with the IRS and found out, given the right set of circumstances, my prescription request wasn't as crazy as I thought.
IF a doctor determines a mobility aid is warranted, and private insurance does not pay for 100% of the mobility assistance device, the IRS, basically, permits a tax payer to deduct a portion of the cost of that device from their taxes, as long as the tax payer files a 1040-Long form, using itemized deductions.
From what I understand (and, please, if I'm incorrect, someone jump on me with both feet! Just, please, wear bedroom slippers or sneakers - no spiked/stiletto heels!), medical costs must exceed 7 1/2% of Gross Income. If the costs exceed the "flat deduction" the government allows which, last year, was $3,300 per person, then the costs may be deducted off Gross Income before actual tax on income is calculated. The higher the tax bracket, the greater actual savings there will be from taxes.
For instance: If a taxpayer can deduct $2K off their Gross Income, and that taxpayer is in the 25% tax bracket, the tax liability will be decreased by $500. If the taxpayer is in the 30% bracket, the liability is decreased by $600.
So let's just say Bill and I were in the 25% tax bracket. Let's assume we've already met the 7 1/2% "off the top" amount. We have no other medical costs above that, except for the purchase of Gilligan, at $2,500.
Let's say our income is $100K. The first $7,500 is nondeductible. Any expenses over that are deductible from the $100K gross income. The only "medical costs" we have above that $7,500 is the $2,500 spent on Gilligan. Since there are no deductions higher than that, it would be better to take the governments standard deduction of $3,300 (2006 figure).
If, however, our total medical costs above that first $7,500 should be, say, $5,000 (including Gilligan), we would deduct the $5K from the $100K, leaving a taxable income of $95K.
And that's just the medical expenses... that doesn't include other deductions like interest, child-care, etc., etc.
(To make it really simple... use TurboTax! :-) )
Many months ago, before we purchased Gilligan, I had jokingly asked the doc about giving me a prescription for a Segway so I could pick one up at my local pharmacy for $50 (the highest prescription co-pay under our medical plan). After we got Gilligan, I did some research with the IRS and found out, given the right set of circumstances, my prescription request wasn't as crazy as I thought.
IF a doctor determines a mobility aid is warranted, and private insurance does not pay for 100% of the mobility assistance device, the IRS, basically, permits a tax payer to deduct a portion of the cost of that device from their taxes, as long as the tax payer files a 1040-Long form, using itemized deductions.
From what I understand (and, please, if I'm incorrect, someone jump on me with both feet! Just, please, wear bedroom slippers or sneakers - no spiked/stiletto heels!), medical costs must exceed 7 1/2% of Gross Income. If the costs exceed the "flat deduction" the government allows which, last year, was $3,300 per person, then the costs may be deducted off Gross Income before actual tax on income is calculated. The higher the tax bracket, the greater actual savings there will be from taxes.
For instance: If a taxpayer can deduct $2K off their Gross Income, and that taxpayer is in the 25% tax bracket, the tax liability will be decreased by $500. If the taxpayer is in the 30% bracket, the liability is decreased by $600.
So let's just say Bill and I were in the 25% tax bracket. Let's assume we've already met the 7 1/2% "off the top" amount. We have no other medical costs above that, except for the purchase of Gilligan, at $2,500.
Let's say our income is $100K. The first $7,500 is nondeductible. Any expenses over that are deductible from the $100K gross income. The only "medical costs" we have above that $7,500 is the $2,500 spent on Gilligan. Since there are no deductions higher than that, it would be better to take the governments standard deduction of $3,300 (2006 figure).
If, however, our total medical costs above that first $7,500 should be, say, $5,000 (including Gilligan), we would deduct the $5K from the $100K, leaving a taxable income of $95K.
And that's just the medical expenses... that doesn't include other deductions like interest, child-care, etc., etc.
(To make it really simple... use TurboTax! :-) )